What product liability insurance covers — and how it differs from public liability
Public liability insurance covers accidents arising from your premises and operations — a customer slipping in your shop, or being struck by stock falling off a shelf. Product liability insurance covers injury or property damage caused by what you sell — a customer getting food poisoning from something you served, or an electrical appliance short-circuiting and damaging their home. The two protect different things; buying one doesn't automatically mean the other is included.
| Policy | Covers | Example |
|---|---|---|
| Public Liability | Third-party injury/loss from your premises or operations | Customer slips in-store, struck by falling stock |
| Product Liability | Third-party injury/loss caused by what you sell | Food poisoning, electrical fault, a toy that injures a child |
Many insurers bundle both into a single "combined public liability" policy for convenience — but that doesn't guarantee the product liability extension is actually included. Always confirm the exact wording of your policy terms before you assume it's covered.
What the law says: selling unsafe goods already carries a statutory duty
Like public liability insurance, product liability insurance itself has no general statutory requirement in Hong Kong. But that doesn't mean selling goods carries no legal responsibility — the Consumer Goods Safety Ordinance (Cap. 456) already places a statutory safety duty on manufacturers, importers and suppliers, requiring the consumer goods they supply to be reasonably safe. Selling unsafe goods is itself an offence and can be prosecuted by Customs. Insurance doesn't cover that statutory liability, but it does cover the civil compensation and legal defence costs you may owe if your product injures a third party or damages their property.
Insurance doesn't replace your statutory duty
Holding product liability insurance doesn't mean you can ignore product safety — the supplier's duty under the Consumer Goods Safety Ordinance stands on its own. Getting quality control right at the source is step one; insurance is the last line of defence.
Which businesses need to pay particular attention
Any business selling a physical product — not just services — should assess this exposure. A few categories especially so:
- Food & beverage — Food poisoning and allergic reactions are the most common source of claims. Confirm your "combined public liability" policy explicitly includes a "food and drink poisoning" extension.
- Retail / online sellers — Electricals, cosmetics, toys, and health products carry higher exposure than stationery or apparel.
- Importers / distributors — Even if you don't manufacture, you're still liable if an imported product causes harm — it's not only the manufacturer's responsibility.
- Exhibitors / market-stall vendors — Venues such as HKCEC or AsiaWorld-Expo often require proof of a policy before granting booth access.
The three mistakes owners make most often
"I already have public liability, that covers everything"
Not necessarily. Unless the policy explicitly lists a "product liability" extension, a standard public liability policy doesn't automatically cover harm caused by what you sell.
- "My shop is small, no one's going to sue me" — Claims risk relates to product category and exposure to the public, not company size.
- "I only sell online, I don't need it" — Online sellers are still suppliers, and can be sued directly just the same. Without a physical shop to verify against, online sellers arguably need the insurance and legal backup even more.
The real cost of skipping it
If a customer is injured or made ill by something you sold, you're not just facing medical costs and compensation — there are hidden costs too, such as product recalls and PR handling. Even if you eventually win the case, legal defence costs alone can be substantial. Not sure whether your current policy has this gap? Use our coverage check for a two-minute assessment, or reach out and we'll go through your policy with you for free.